Cash is king: What Aditya Birla Group exec's statements on Rs 25 cr in cupboard reveals

In October 2013, the CBI was probing the coal block allocation case in which former coal secretary PC Parakh and head of Aditya Birla group, Kumar Mangalam Birla, were named, when they had found two cupboards in one of the industrial group’s offices in Delhi that was filled with Rs 25 crore in cash. Hindalco, the company in whose office the money was found, failed to explain why it was there.

However, the cash, it turns out, was part of the company’s deals under which it routed large sums of cash through ‘angadias’, who transfer cash or valuables from location to location, and the company is still to disclose who the recipients of the money were.

An exclusive report in The Indian Express said that a top executive with Aditya Birla Management Corporation has told Income Tax department officials that he couldn’t remember the amount of cash the company may have sent and they had destroyed all records of it. I-T officials have, however, reportedly found a notebook with a list of transactions from 2010 to 2012.

The Income Tax department’s report on the matter quotes the official as saying that large amounts of cash ranging from Rs 50 lakh to one crore used to be received at the company’s office on Parliament Street from unknown sources and the money was then “paid/disbursed to certain unidentified persons on regular basis”.

The executive questioned by the Income Tax department has told them that all transactions involving the cash were done on the instructions of the Group’s Executive President.

However, the company told clarified that the report has been  quoted totally out of context.  “The news item is purported to be on a report on the ongoing assessment by income tax department arising out of the search conducted by them in October 2013. The purported report is an internal and confidential report of the Income tax department, the assessment of which is yet to commence, and therefore the news report based on a purported internal report may or may not contain true or complete facts,” the company said in a statement today.

At the time the cupboard full of cash was found, Hindalco had claimed that they were ’taken aback’.

“The Group has already made it clear through its press release dated October 17th, 2013 that it has been both taken aback and concerned about the money seized in one of the Group company’s premises.  We are aware that some of the employees of the Group Company’s Delhi office have been questioned by the investigating agencies.  We are not privy to what they have stated to the investigating agency which has been reported in one of the newspapers. And therefore would not wish to comment at this stage.

By making a reference to a completely unrelated/unconnected pending matter of Coal block allocation made to Hindalco in 2005, the news report tantamounts to interference in the ongoing investigation and to the detriment of Hindalco.

The company will continue to extend full cooperation to the agencies, as and when required.  It is contemplating taking appropriate steps to ensure that defamatory reports aimed at reputational harm and at misleading the public and adversely impacting/prejudicing the current judicial proceedings before the court of law or other authorities, are not made”, Hindalco said in a statement.

Cash transactions, even large ones, remain an integral part of multiple Indian businesses and if this report is anything to go by even the biggest companies in the country swear by it. While there’s no indications just yet, it remains to be seen if it is revealed who the payments were made to and to what end they were made.